There are three prime sources of information for analysts trading on any type of financial market - inside information, the fundamentals and price data. Obviously, for individuals not close to the core of the markets ie most of the planet, only the latter two have significance although skilled analysts utilising creative lateral thinking are able to replicate inside information with slick analysis of publicly available information.
Each market sector and sub-sector has it's own unique set of fundamental parameters. Although I believe that I include every single relevant parameter in my analysis of global football betting markets, I often have to liaise with others when dealing with International Financial Markets (IFMs) as I simply do not have the knowledge to incorporate the relevant data. For example, sectors like nanotechnology or biotechnology are young/youngish sectors where the markets are still relatively inefficient (ie all the information is not in the market price) and if I were to blindly apply my Unified Trading Model (UTM) to such sectors my edge would be minimal or non-existent. The edge in these market sectors is entirely within the fundamental parameters and links with individuals undertaking basic frontline research and development (R&D) is critical.
Most sports markets are mature although I still believe them to be inefficient due to the manipulation and corruption that is common throughout markets in their latter stages of maturity. The logic behind this assertion being that, as markets move towards monopolies, duopolies or cartelisation, inefficiencies are built in to suit the individuals that control the markets. This same structure exists across all mature markets whether such sectors be oil, aircraft manufacture, global major accountancy firms or football betting markets.
Look through any academic journal and you will be surprised how many papers have been prepared historically utilising sports markets as a substitute for IFMs. All markets are functions of economic and psychological mechanisms and, evidently, the behavioural mechanisms are equivalent across all markets as we are all human and aggregating the market impact of our individual personality disorders and styles is a universal constant. Other analytical structures are also replicated between sports markets and IFMs. Indeed, the only areas of difference relate to systemic infrastructure, fundamental parameters and the closed nature of most sports markets ie they are not correlated in any meaningful manner with other global financial structures (the attitude of the IMF or the World Bank rarely impacts on Aston Villa versus Everton, for example). Otherwise the parallels are startling. Arbitrage trading has equivalence between sports and IFMs; ante-post markets share common territory with options/futures analysis; day trading = poker = in running trading on football; football betting cartels are equivalent to power abuses in any other mature market sector.
It is not the purpose of this post to be focusing on the fundamental parameters as we have been providing (and will continue to publish) posts covering some of these relevant parameters. Here we are interested solely in price.
Price is very manipulated on a range of levels. The only true price is that quoted to you by a market maker regarding the amount that they are willing to lay at a particular price. Once a trader starts to be placing relatively significant positions with respect to the liquidity of the market, the bookmaker will frequently price scalp. This occurs both on electronic exchanges and in person-to-person trading. As an example, we wished to trade several thousand dollars on Arminia Bielefeld against Dortmund last Friday at +0.0,0.5 1.75. One bookmaker that we approached offered us half our bet at this price and the other half at 1.70. Either the market wasn't deep enough to accommodate our position or the layer was undertaking blatant price scalping. Either way we will not use that broker again.
Leisure traders and many professionals are unable to verbally confirm the existence and market depth of a price due to time and motion issues - the info gained simply doesn't validate the effort. Consequently, you have two options. The lazy can utilise websites like Oddschecker (www.oddschecker.com) or Soccerway (http://odds.soccerway.com) but we would advise against these choices. The firms collating the prices have no imperative to provide a true price as their money is not on the line. Often the prices are out of date and, even more frequently, plainly incorrect. The preferable option is to access the prices directly from the bookmaker or betting exchange. Although this will not take into account price scalping, it will provide an indication of the price available. Global monitoring of prices in this manner is, however, very time consuming and, to professionals, inefficient.
When I initially established Dietrological several years ago, we based our business in Bucureşti in România. There were two prime reasons for this decision. The country possesses a huge pool of highly talented individualistic IT people and business infrastructures are entertainingly creative. Our IT team collated global price information as follows. A "spider" was set up in the IT section of one of Bucureşti's banks (don't ask!) and collected data from key bookmakers across the planet in real time. Bookies don't like anybody doing this so, to avoid detection, a "mirror" was created at the bank branch that deflected the price data to our server that was set up in a domestic flat in a high rise block in downtown Bucureşti. Meanwhile, our offices were safely esconced in the central area of the city overlooking the beautiful Cismigiu Gardens. Even the bookmakers who were aware of their prices being exported were unable to determine anything other than their data reaching a bank. Perfect! We are now based on the Greek island of Kerkyra and our new methods of monitoring global market prices are even more foolproof but, guess what, that's all I'm willing to tell you!
The key point is that the price is critical on both an informational level and to be able to trade at the best available price. The former is important as such information serves as inputs to our UTM and neural network software while the latter is key as it provides extra value in a trading position. For all leisure traders, these factors have a relevance. Although getting Draw No Bet 1.90 as opposed to 1.88 might seem of minimal consequence when trading in the hundreds of dollars as opposed to the millions, the cumulative impact over months and years is significant and, indirectly, you will be improving the efficiency of the marketplace.
